Research

Working papers

Voting Rationales

 (with Roni Michaely and Irene Yi)

Charles River Associates Award for the Best Paper on Corporate Finance at the 2025 Western Finance Association Meeting 

Best Conference Papers Award at The Mediterranean Accounting Conference (TMAC) 2025 

R&R Journal of Financial and Quantitative Analysis

Using a novel dataset where institutional investors explain their votes—voting rationales—we provide direct evidence on the motivations behind votes against directors. Lack of independence and board diversity are the main stated reasons for opposing directors. These rationales accurately reflect firms’ governance characteristics rather than investors’ rationale-washing, suggesting that investors exercise voting discretion and exert more substantive effort than previously documented. Firms subsequently adjust board composition. Results are robust to alternative explanations, such as proxy advisors’ influence. Rather, voting rationales emerge as a direct communication channel, enabling firms to understand and address investors’ stated concerns.

Media coverage: Harvard Law School Forum on Corporate Governance - The Island

Transparency in Voting: Institutional Investors' Disclosure of Voting Rationales

 (with Daniele Macciocchi, Roni Michaely and Irene Yi)

We study institutional investors' disclosure of voting rationales, voluntary explanations accompanying proxy votes that have become increasingly common over the past decade. Using novel data covering over 33 million votes cast at US firms, combined with survey evidence from stewardship professionals, we document that adoption reflects a structured institution-level policy associated with stewardship incentives, client demand for transparency, and institutional norms. Conditional on adoption, disclosure is not symbolic compliance; rather, it reflects time and resource constraints and occurs when voting decisions are most difficult to interpret, including when investors vote against management, diverge from proxy advisor recommendations, or depart from their general voting policies. On these votes, rationales provide substantive and incremental information. Finally, US institutions experience higher net flows after initiating disclosure, suggesting that clients value this transparency. Our study documents that voting rationales serve as a mechanism through which institutional investors enhance transparency and accountability in their governance decisions.

Media coverage: Oxford Business Law Blog

Monitoring the Auditor: Evidence from Institutional Investors’ Votes

 (with Luciana Orozco)

This paper investigates how institutional investors monitor external auditors through proxy voting. Although auditors play a central role in corporate governance, ratification proposals typically receive near-unanimous support, raising questions about investors' oversight. Using over 3 million votes cast by 1,673 investors, we uncover substantial heterogeneity in monitoring approaches. Hand-collected voting policies reveal that many investors scrutinize non-audit fees and auditor tenure, and their votes generally align with these policies. When investors deviate to support an auditor despite a potential breach, they often publish voting rationales to justify the decision and maintain accountability. These signals have real effects: dissent on non-audit fees predicts lower subsequent fees, while dissent on tenure predicts higher auditor turnover. Based on voting patterns, we classify investors as automatic approvers, rule-based voters, and deliberate voters. Rule-based voters-those guided by explicit criteria-are the most informed, more likely to detect poor audit quality. In contrast, automatic approvers-the largest group-exert minimal oversight and are less likely to hold firms with high auditor tenure or non-audit fees.

When the Examiner Knocks: Banks’ Strategic Provisioning Around CRA Exams

 (with Luciana Orozco)

R&R Management Science

Do scheduled supervisory examinations shape banks’ reporting decisions? We examine this question in the context of the Community Reinvestment Act (CRA), which encourages U.S. banks to serve low- and moderate-income communities. Federal agencies conduct CRA exams periodically, creating predictable windows of scrutiny that allow banks to strategically manage reporting. We find that banks increase loan loss provisions in the quarters leading up to exams and reverse them afterward, consistent with strategic accrual management to influence evaluation outcomes. This behavior is concentrated among underperforming banks relative to peers and those operating in CRA-eligible or high-minority areas. In contrast, it is limited to publicly traded banks and those with low regulatory capital, where market discipline and prudential constraints dominate. Importantly, pre-exam provisioning reduces the likelihood of unfavorable ratings, showing that accounting discretion can materially alter regulatory outcomes. Overall, our findings highlight how the timing and objectives of oversight affect managerial reporting choices and reveal an unintended consequence of stakeholder-oriented regulation.

Decentralized Voting in Mutual Fund Families - Draft Coming soon!

(with Roni Michaely Matthew C. Ringgenberg, and Irene Yi)

We provide the first large-sample evidence that decentralized voting is widespread within mutual fund families. Contrary to the view that families vote as unified blocs, we find that at least 40% of families exhibit evidence of decentralized voting, starting as early as 2006. We measure decentralization using voting disagreement within the family, which is low unconditionally due to the high volume of routine proposals, but rises substantially for controversial proposals, environmental and social issues, and when proxy advisors recommend voting “against.”  Decentralized voting is more prevalent in families with more active funds and greater stewardship resources, and funds within a family vote more similarly when they share management structures and characteristics. Decentralization has consequences for governance and fund investors. First, it weakens the monitoring effectiveness of institutional investors—a result we corroborate using Vanguard's 2019 adoption of decentralized voting as a quasi-natural experiment. Second, funds that deviate from their family’s voting stance charge higher fees without delivering higher returns for clients. Yet, funds that deviate attract higher inflows.

The bright side of stock repurchases 

(Job Market Paper)

I provide evidence of actual stock repurchases increasing future investment in firms subject to strong asymmetric information that are reliant on external capital markets. To address endogeneity, I use an instrumental variables approach based on price pressures created by mutual funds' liquidity needs. The results are consistent with firms using actual repurchases to signal their type, which eases access to capital markets and ultimately improves real outcomes. 

Media coverage: WSJ Moneybeat - Clearbridge

Do institutional investors care about corporate social responsibility and irresponsibility?* 

 (with Antonio B. Vazquez)

This paper investigates how Corporate Social Responsibility (CSR) and Corporate Social Irresponsibility (CSiR) change when the degree of monitoring by institutional investors varies. We exploit changes in institutional investor distraction due to extreme events in unrelated industries, which is a plausible exogenous source of variation in monitoring intensity. We show that tighter monitoring reduces both CSR and CSiR. The impact on the former is mainly found in contexts prone to agency conflicts, while the effect on the latter is concentrated in settings where there is a demand for advising. Our results are robust to alternative definitions of monitoring intensity and CSR.

*Available upon request